Undercover Boss: How UniFirst Keeps Margins Up on Uniforms Without Losing Its Shirt

Last Updated Jan 7, 2011 2:46 PM EST

If any apparel company should have been slammed by the recession, it would be UniFirst Corporation (UNF), which makes workplace uniforms and protective clothing.

"If people aren't working, we don't have people to put our uniforms on,'' says CEO Ronald Croatti, who will appear on CBS's Undercover Boss this Sunday at 9 p.m. ET/PT.*

But the company has weathered the downturn well. No company is truly recession proof, he tells BNET, but he make sure UniFirst is recession resistant.

From humble beginnings as a family business in 1936, UniFirst has become one of the fastest-growing companies in the $17 billion uniform and textile services industry. The company serves over 225,000 customer locations throughout North America and employs nearly 10,000.

UniFirst hit a major milestone in 2008, when annual revenues exceeded $1 billion. Croatti saw the slowdown coming, he says. But he looked at it as an opportunity.

Plenty of businesses toij the easy route during the downturn and cut costs. UniFirst resisted the temptation and boosted revenue lines instead -- no easy feat when the cost of raw goods is rising to historic levels. It helps that the company has been using mostly poly-cotton blend fabrics with only 35 percent cotton for over 20 years. So the big increases in cotton prices, for example, haven't hurt as much. "We've only seen minor pricing adjustments."

Like many U.S. manufacturers, UniFirst did have to cut production levels in 2009, but Croatti says things have stabilized. And the company is still very focused on building relationships that will keep sales growing.

"I'm old school," he says, "It's all about making the sale." Croatti says UniFirst sees its customers 52 times a year. At the same time, he wants to foster UniFirst's family business culture by encouraging every manager to get to know his or her employees ("team partners") personally.

To prove the point, Croatti himself -- albeit in disguise -- goes to work on the production floors of three of UniFirst's facilities, courtesy of Undercover Boss.

He's no stranger to the terrain: On his way to becoming CEO, Croatti worked throughout the company, even running a sewing machine. But he says the show gave him a first-hand look at how all Unifirst's C-suite's policies and procedures maintain quality and keep the balance sheet profitable. He confesses it was an eye-opener that gave him plenty of ideas. However, he's quick to point out,


"One word we have [at UniFirst headquarters] is change. Nothing stays the same. We are obviously trying to gain market share, and [to] look for additional products and services. There's always room to improve."

*Disclosure: CBS owns BNET.com.

Images via UniFirst.com